USDA awards $10.5M for fresh grapes, highlighting perishable food supply chain needs

Contract Overview

Contract Amount: $10,495,686 ($10.5M)

Contractor: Wescott Agri Products, Inc

Awarding Agency: Department of Agriculture

Start Date: 2024-06-20

End Date: 2024-12-18

Contract Duration: 181 days

Daily Burn Rate: $58.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 15

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010025/4100030329/GRAPES VARIETY FRESH CTN-19 LB

Place of Performance

Location: ELGIN, WABASHA County, MINNESOTA, 55932

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $10.5 million to WESCOTT AGRI PRODUCTS, INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010025/4100030329/GRAPES VARIETY FRESH CTN-19 LB Key points: 1. Contract value represents a significant investment in essential food commodities. 2. Competition dynamics suggest a robust market for agricultural suppliers. 3. Contract duration of 181 days indicates a focus on immediate supply needs. 4. Fixed-price contract structure aims to control costs for the government. 5. Geographic focus on Minnesota points to regional distribution priorities. 6. This award supports the broader mission of USG food donation programs.

Value Assessment

Rating: good

The contract value of $10.5 million for fresh grapes appears reasonable given the quantity and perishable nature of the goods. Benchmarking against similar large-scale food procurement contracts for donations would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to lock in costs, which is generally favorable for the government, assuming competitive pricing was achieved during the bidding process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple bidders were considered after an initial exclusion period. The presence of 10 bids (implied by 'no': 15, though 'no' typically refers to the number of offers received, not necessarily unique bidders) suggests a healthy level of competition for this agricultural commodity. This competitive environment is expected to drive favorable pricing for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by securing goods at market-reflective prices, minimizing the risk of overpayment.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USG donation programs. Services delivered involve the procurement and supply of fresh grapes for distribution. Geographic impact is primarily focused on Minnesota, serving as a distribution hub. Workforce implications may include jobs in agriculture, logistics, and food distribution within the supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Perishability of goods requires efficient logistics and distribution to prevent waste.
Market price fluctuations for fresh produce can impact long-term cost predictability.
Dependence on a single supplier for a specific commodity carries inherent supply chain risks.

Positive Signals

Award to an established entity like Wescott Agri Products suggests a reliable supplier.
The firm fixed-price contract provides cost certainty for this procurement.
Full and open competition indicates a healthy market and potential for quality goods.

Sector Analysis

This contract falls within the broader agricultural commodities sector, specifically focusing on fresh produce procurement for federal food donation programs. The market for agricultural commodities is vast and subject to seasonal variations, global supply, and demand dynamics. Federal procurement of such items often aims to support domestic agriculture while fulfilling humanitarian or nutritional assistance goals. Comparable spending benchmarks would involve analyzing other large-scale procurements of fresh fruits and vegetables by agencies like USDA or DoD.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). While this specific award may not directly benefit small businesses through a set-aside, the overall agricultural supply chain often involves numerous small farms and distributors. Wescott Agri Products, Inc. may engage small businesses as subcontractors, contributing indirectly to the small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract is likely managed by the Agricultural Marketing Service (AMS) within the USDA, which is responsible for procurement and distribution of agricultural commodities. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Food and Nutrition Service (FNS) Programs

Risk Flags

Perishability Risk
Supply Chain Vulnerability
Market Price Volatility

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $10.5 million to WESCOTT AGRI PRODUCTS, INC. COMMODITIES FOR USG FOOD DONATIONS: 2000010025/4100030329/GRAPES VARIETY FRESH CTN-19 LB

Who is the contractor on this award?

The obligated recipient is WESCOTT AGRI PRODUCTS, INC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Agricultural Marketing Service).

What is the total obligated amount?

The obligated amount is $10.5 million.

What is the period of performance?

Start: 2024-06-20. End: 2024-12-18.

What is the historical spending pattern for fresh grape procurement by the USDA for donation purposes?

Analyzing historical spending data for fresh grape procurement by the USDA for donation purposes requires accessing detailed procurement records over several fiscal years. Typically, such spending can fluctuate based on agricultural yields, market prices, and the specific needs of food assistance programs. Factors like the 'perishable prepared food manufacturing' NAICS code suggest a focus on processed or packaged grape products in some instances, while this specific award is for fresh grapes. Understanding the volume and value of past contracts would reveal trends in demand and the government's ability to secure these commodities consistently and cost-effectively. Without specific historical data readily available for this exact commodity and program, it's difficult to provide precise figures, but general trends in agricultural commodity procurement show variability influenced by seasonal availability and programmatic adjustments.

How does the per-unit cost of these grapes compare to market rates or similar federal contracts?

Determining the precise per-unit cost requires knowing the exact quantity (e.g., pounds or kilograms) of grapes procured under this $10.5 million contract. The contract details mention 'CTN-19 LB' for grapes, indicating 19-pound cartons. If we assume the entire $10.5 million was spent on these cartons, the cost per carton would be approximately $10,495,685.96 / (total number of cartons). To compare this to market rates, one would need to research current wholesale prices for 19-pound cartons of fresh grapes in the relevant region (Minnesota). Federal contracts often aim for prices at or below market rates due to bulk purchasing power and competitive bidding. However, the 'perishable' nature and specific variety could influence pricing. A detailed comparison would involve obtaining the exact quantity procured and benchmarking against contemporary wholesale market data and other federal food procurement awards.

What are the specific risks associated with procuring perishable goods like fresh grapes for federal programs?

Procuring perishable goods like fresh grapes introduces several risks. Foremost is the risk of spoilage and waste due to the short shelf life, which can occur during transit, storage, or distribution if not managed meticulously. This necessitates robust cold chain logistics and timely delivery schedules. Market price volatility for fresh produce is another significant risk; unexpected price surges can increase procurement costs beyond initial estimates, even under a fixed-price contract if the quantity is adjusted or if the initial estimate was based on lower market conditions. Supply chain disruptions, whether due to weather events affecting harvests, transportation issues, or labor shortages, can also impact the availability and timely delivery of grapes. Finally, ensuring consistent quality and meeting specific varietal requirements across multiple shipments adds complexity to quality assurance.

What is the track record of Wescott Agri Products, Inc. in fulfilling federal contracts, particularly for perishable goods?

Wescott Agri Products, Inc. has been awarded this contract, suggesting they possess the capability to meet the government's requirements. To assess their track record thoroughly, one would need to examine their past performance on federal contracts, specifically looking at awards for perishable goods. Key indicators include on-time delivery rates, adherence to quality specifications, and any history of contract disputes, terminations, or performance issues. Information on past performance is often available through federal procurement databases (like SAM.gov) or through agency-specific performance evaluation systems. A positive history of fulfilling similar contracts would indicate a lower risk associated with this award, while any negative performance indicators would warrant closer scrutiny of this current contract's execution.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact price discovery and overall value for taxpayers?

The 'Full and Open Competition After Exclusion of Sources' method is designed to ensure broad competition while potentially addressing specific market conditions or prior contractual relationships. Initially, certain sources might be excluded (e.g., if a previous contract was terminated or if specific capabilities were sought). However, the subsequent 'full and open' phase allows any responsible source to submit an offer. This approach generally promotes robust price discovery by encouraging multiple bidders to compete, driving prices down towards market equilibrium. For taxpayers, this means a higher likelihood of achieving best value, as the competitive pressure helps prevent overpricing and ensures that the government obtains goods or services at a fair and reasonable cost. The effectiveness hinges on the clarity of the exclusion criteria and the subsequent outreach to potential bidders.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › Perishable Prepared Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1424B0346

Offers Received: 15

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 28085 COUNTY ROAD 25, ELGIN, MN, 55932

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,495,686

Exercised Options: $10,495,686

Current Obligation: $10,495,686

Actual Outlays: $10,379,919

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline